The recent decline in Nvidia shares is a great buying opportunity, according to Bank of America Merrill Lynch.

The firm reiterated its buy rating for the chipmaker and added the company to its US1 top ideas list. It cited the company's product leadership several large growth categories.

Nvidia is "one of the more unique investments in semis/technology, levered to multiple 10x growth markets in artificial intelligence (AI), gaming, virtual reality and autonomous cars (AV)," analyst Vivek Arya wrote in a note to clients Tuesday. "Near-term the stock is sensitive to risk-off in high-growth tech stocks, and to the noise around crypto-mining and autonomous cars. But, the recent … sell-off creates an enhanced oppty. ahead of 2H product launches."

The company's stock is up 104 percent in the past 12 months through Monday compared with the S&P 500's 9.5 percent gain. That performance ranks No. 3 in the entire S&P 500. The shares are down 13 percent from its high on Mar. 13.

The analyst said Nvidia has just 5 percent share of the $50 billion market for data center and artificial intelligence chips. He downplayed the plunge in digital currency prices in recent months, which sparked fears of lower cryptocurrency mining demand for the company's products. Arya cited how selling prices for Nvidia's cards are still 50 percent more than its suggested list prices, showing the strength of underlying demand from PC gamers.

"The proliferation of e-sports which has become a global phenomenon and is attracting a growing base of gamers and viewers," he wrote. "The next catalyst for PC gaming could be launch of new Volta based gaming GPUs (1100 series) in 2H18."